Napster in deal with European indie labels

(IDG) -- In his first trip to the U.K., Napster founder Shawn Fanning announced a far-reaching deal Tuesday with dozens of independent British and European record labels. The agreement will allow Napster to use the music from more than 150 independent labels as part of its paid subscription service, which is scheduled to launch later this summer.

The British trade group Association of Independent Music, or AIM, which claims to represent more than 25 percent of the U.K.'s music market, hailed the Napster deal as a "natural marriage" between independent artists and the technorebels among Napster users. No financial terms of the deal were disclosed.

The labels represented by AIM include many well-known artists such as Moby, Tom Jones, Badly Drawn Boy, Tricky, and Belle and Sebastian. Fanning said the deal was a breakthrough for recording artists "who might not be played on the radio, or have their videos played on MTV."

Alison Wenham, AIM's chief executive, said that the indie labels wanted to work with Napster, even though their artists have often been the most vulnerable to free downloads. "We are neither culturally nor financially attuned to long litigation to protect copyright," Wenham said. "But this deal covers labels for whom access to the formal market is difficult."

Wenham said the indie labels' music would be available through Napster by late July. Napster officials, however, declined to commit to that date, saying only that their entire paid-subscription service should be running by "late summer."

Hank Barry, Napster's interim CEO, said that more than 1 million people had signed up to beta-test the new paid service, and that Napster would be contacting them "this week" to commence beta testing.

Barry also said that neither the deal with AIM nor the one with a European independent-label consortium called Impala would affect Napster's financial arrangement with Bertelsmannn, which the company secured last fall. "They have been a great partner," Barry said. "They're very supportive of our reaching out in this way."

All the record company officials present at today's press conference stressed that they were not taking a stance against the major labels per se.

"We are not fighting against the majors," said Patrick Zelnik, a representative from Impala. "We are fighting against concentration, and for access to the consumer." Zelnik noted that European Commission regulators have announced their intention to investigate the online plans of some major labels, including Duet and MusicNet.